Comments on: Incoterms : FOB – Free On Board http://www.3plwire.com/2006/07/08/incoterms-fob-free-on-board/ Thu, 26 Jan 2012 23:18:27 -0600 http://wordpress.org/?v=2.9.2 hourly 1 By: Rob http://www.3plwire.com/2006/07/08/incoterms-fob-free-on-board/comment-page-1/#comment-1178 Rob Sun, 09 Jul 2006 17:34:41 +0000 http://www.3plwire.com/?p=324#comment-1178 Incoterms are of course still useful in the purchasing arena. I only meant to say that they are less often used in transportation circles, as fewer LCs are involved in international transactions and thus less often a consideratioin when processing shipping documents. Let me also clarify my quick comment of above. "FOB Air" was meant to describe a situation where the seller/export forwarder prepaid the door to airport transportation, and then billed it on the commmercial invoice. That would be in contrast to shipping product "freight collect" where no shipping charges appeared on the commmerical invoice, the HAWB was freight collect and the customs broker collected the door to door shipping charges from the importer. I'm not sure if the term is used like this anymore, but that was the case in my time as a forwarder. Incoterms are of course still useful in the purchasing arena. I only meant to say that they are less often used in transportation circles, as fewer LCs are involved in international transactions and thus less often a consideratioin when processing shipping documents.

Let me also clarify my quick comment of above. “FOB Air” was meant to describe a situation where the seller/export forwarder prepaid the door to airport transportation, and then billed it on the commmercial invoice. That would be in contrast to shipping product “freight collect” where no shipping charges appeared on the commmerical invoice, the HAWB was freight collect and the customs broker collected the door to door shipping charges from the importer.

I’m not sure if the term is used like this anymore, but that was the case in my time as a forwarder.

]]> By: 3plwire http://www.3plwire.com/2006/07/08/incoterms-fob-free-on-board/comment-page-1/#comment-1171 3plwire Sun, 09 Jul 2006 01:30:22 +0000 http://www.3plwire.com/?p=324#comment-1171 Rob, Appreciate the insight. Even today I still see the misuse of the FOB incoterm on commercial invoices. I think that the misusage (at least here in the U.S.) stems from the U.S. UCC term FOB, which has an entirely different meaning and application than the Incoterms 2000 definition. The FOB Incoterm is strictly for ocean shipments and cannot be correctly applied to any mode of transport that involves air. Incoterms in general still play an extremely valuable role in international trade today and if I was negotiating pricing with my overseas supplier I would absolutely include the agreed upon Incoterm as part of the international sales contract. Rob,
Appreciate the insight. Even today I still see the misuse of the FOB incoterm on commercial invoices. I think that the misusage (at least here in the U.S.) stems from the U.S. UCC term FOB, which has an entirely different meaning and application than the Incoterms 2000 definition. The FOB Incoterm is strictly for ocean shipments and cannot be correctly applied to any mode of transport that involves air.

Incoterms in general still play an extremely valuable role in international trade today and if I was negotiating pricing with my overseas supplier I would absolutely include the agreed upon Incoterm as part of the international sales contract.

]]> By: Rob http://www.3plwire.com/2006/07/08/incoterms-fob-free-on-board/comment-page-1/#comment-1170 Rob Sun, 09 Jul 2006 00:10:17 +0000 http://www.3plwire.com/?p=324#comment-1170 In the old days of airfreight people used (misused) the term FOB to mean that the buyer was paying for the airfreight(which normally included cartage to the airport). It was meant to draw distinction between prepaid airfreight appearing on the commerical invoice and collect airfreight that was invoiced by the airline. Again, it was a total misuse of the term, but it was pretty common. Now that LC's are so much less common, Icoterms in general are much less often used. But twenty years ago there was a big difference between "FOB air" and regular FOB. In the old days of airfreight people used (misused) the term FOB to mean that the buyer was paying for the airfreight(which normally included cartage to the airport). It was meant to draw distinction between prepaid airfreight appearing on the commerical invoice and collect airfreight that was invoiced by the airline. Again, it was a total misuse of the term, but it was pretty common.

Now that LC’s are so much less common, Icoterms in general are much less often used. But twenty years ago there was a big difference between “FOB air” and regular FOB.

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